Clear title is essential to owning real estate, whether you’re buying a home, purchasing a warehouse or investing in an oilfield. Although it doesn’t always seem obvious, a central question in any real estate transaction is always whether the seller actually has secure title to pass to the buyer. In most cases, there is little reason to doubt the buyer’s full rights to the property, so many people go through the purchase and sale process without really thinking about title — but you shouldn’t get the false impression that the issue isn’t important.
Since deeds for real property have been being recorded officially in the U.S. for hundreds of years, so you might assume that the question of whether a buyer has clear title is pretty straightforward. In reality, any number of situations can arise in which your title to all or part of a property could come into serious question. A boundary or easement dispute, for example, can arise whether you are confident in your title or not.
Other situations that commonly arise involve fraud at some point. Deeds can be lost, or past sellers may have sold the property, granted an easement, or leased mineral rights but failed to record the transaction. In other cases, unrecorded mortgages, mechanic’ liens or even old tax liens have been discovered after closing. In more cases than you might expect, deeds, mortgages or powers of attorney have been forged as part of a scam or due to identity theft. Whether a mistake was made or a conveyance was fraudulent, these issues can keep the current owner from selling or borrowing against the property or even put them at risk for litigation.
Disputes can also arise when it comes time to collect on title insurance. Like all insurance companies, title insurers have the duty to operate fairly and in good faith, but some have been known to intentionally delay or wrongly deny claims in bad faith. Even when bad faith is not an issue, you and your title insurer could disagree about your coverage. Even with clear title, disputes may arise among lenders in foreclosure or bankruptcy.
As you can tell from these examples, getting secure, defensible title really is the foundation of your real estate purchase. If you or your business is facing the need to defend your ownership rights against alleged title defects, insurance disputes or any threat, it is crucial to obtain representation from a law firm with significant experience in real estate title litigation.
